Gold prices in Bangladesh have once again been raised, with jewellers setting the new rate at Tk 153,474 per bhori (11.664 grams), effective from tomorrow. This increase follows a consistent trend of rising gold prices over the past year, driven by both international market fluctuations and domestic supply constraints.
The Bangladesh Jewellers’ Association (BAJUS) made the announcement today after a meeting of its standing committee on pricing and price monitoring. The decision, as per a press release from the association, was attributed to a rise in the price of pure gold in the local market. This adjustment places the latest gold rate just shy of the country’s all-time high of Tk 154,525 per bhori, recorded on February 20, 2024.
Gold prices in Bangladesh have been steadily climbing for over a year, reflecting trends in the global market and supply volatility. The surge first gained momentum in July 2023, when gold prices in the country crossed the Tk 100,000 mark per bhori for the first time in history. Since then, prices have shown an upward trajectory, influenced by international market trends, the devaluation of the local currency, and challenges in securing a stable domestic supply.
Factors Driving the Price Surge
Experts attribute the rising gold prices to several factors, primarily the fluctuations in the global gold market. Gold is traditionally seen as a safe-haven asset, and demand for the precious metal tends to increase during periods of economic uncertainty and geopolitical instability. Ongoing global trade tensions, inflationary pressures, and the anticipation of interest rate cuts by major central banks have contributed to a bullish gold market worldwide.
Additionally, supply issues within Bangladesh play a significant role in the price hikes. The country requires an estimated 20 to 40 tonnes of gold annually, yet an overwhelming 80 percent of the supply is met through smuggling. Strict import regulations and high duties on legally imported gold have made it challenging for jewellers to source gold through official channels, pushing prices higher in the local market.
Impact on the Market and Consumers
The continuous rise in gold prices has had a notable impact on both businesses and consumers. Jewellers have had to adjust their pricing frequently, making it difficult for customers to anticipate stable rates. Higher gold prices have particularly affected middle-income and lower-income buyers, for whom purchasing gold jewellery has become increasingly unaffordable.
Despite the rising costs, gold remains a highly valued investment and a crucial part of wedding traditions in Bangladesh, ensuring that demand persists even amid price hikes. However, industry insiders warn that further price increases could lead to a slowdown in sales, particularly in the jewellery sector, as many consumers may delay purchases in hopes of a price correction.
Future Outlook
Looking ahead, analysts suggest that gold prices in Bangladesh will largely depend on international market trends and government policies on gold imports. If global gold prices continue to rise and domestic supply constraints persist, further price hikes may be inevitable. However, any policy changes to ease legal gold imports or reduce smuggling could help stabilize the market in the long run.
For now, buyers and investors remain cautious as gold prices hover near record highs, waiting to see whether the market will continue its upward trajectory or undergo a correction in the coming months.
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